Faith, Finance

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Investing and Saving
Making it work for you
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Personal Finance Workshops

• Budgeting and Debt Reduction
• Saving and Investing
• Personal Financial Management
• Stewardship
• Charitable Giving

3
Our mission today

• Rent vs own
• Growing my money
• Types of funds
• Where to go for help

The wise man saves for the future but the foolish
man spends whatever he gets. Proverbs 2120
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Define terms

• Savings
• Investments
• Trading

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Savings, Investments, Trading

• Whats the difference?

Interest Rent
Capital Gains Buy/Own
X
X
X
X
Usually guaranteed interest and time period
Risk and volatility
This graphic is conceptual only
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Risk Tolerance
Picture Source http//images.google.ca/imgres?img
urlhttp//confluence.engin.umich.edu/download/att
achments/3958/
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Volatility vs. Risk

• What is YOUR comfort with risk?
• Select investments you will feel comfortable with
  
• Stops pulling out of existing investments
• Properly plan based on your individual comfort
  and needs
• Allows you to sleep at night

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Income Tax Treatment

• What is my
• effective tax rate?
• marginal tax rate?
• Are all investments taxed the same?
• Interest
• Capital gains
• Capital losses

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Income tax advantaged strategies

• RSP
• Spousal RSP
• New home buyer
• RRIF
• RESP
• TFSA

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Interest

• What is Compound interest?
• Rule of 72
• 72 divided by interest rate earned

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Rule of 72

• Assume age 21 and you save 1,000 per year

Age Interest at 6
Age Interest at 9
21 1,000
21 1,000
33 2,000
29 2,000
45 4,000
37 4,000
57 8,000
45 8,000
69 16,000
53 16,000
61 32,000
69 64,000
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Investment Funds

• Compare investment funds vs interest payments

TSE 300 Index Avg rate 10-12
GIC 5 yr interest Avg rate 7-8
This graphic is conceptual only
Compare to present GIC avg 4-5, TSX avg 10-12
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What is an investment fund?

• Define
• History
• Prospectus

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Dollar Cost Averaging
Option 1 1,000 _at_ 10 per unit 100 units
Option 2 invest 100 per month over a 10 month
period
This graphic is conceptual only
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Do not put all your eggs in one basket
Diversification
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Diversification vs Diffusion
This graphic is conceptual only
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Types of products and funds

• Interest
• GICs
• Annuities
• Bonds
• Funds
• Income
• Balanced
• Equity

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Fund Managers

• Top down
• Bottom up

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Mutual Funds / Segregated Funds

• Provided by
• Guarantees
• Your estate
• Creditor protection
• Beneficiary
• Costs..

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Costs

• Loads
• Front end
• Back end / DSC
• No load
• Management Fees

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Remember

• Stay Invested Dont panic
• The Power of Compounding/Rule of 72
• Dollar Cost Averaging Invest regularly and Do
  not time the market

The way of a fool is right in his own eyes, but
a wise man is he who listens to counsel
Proverbs 1215
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Want to go deeper?

• To review or start your plan
• consider FaithLife Financial
• Go Green - www.faithlifefinancial.ca
• download financial tools
• view seminars
• calculators
• great financial articles